Friday, 26 October 2007

Growing Pains

Our NZ team is growing (hi Chris, Matt!) so we're searching for new office space. This is proving traumatic.

I got in touch with the operators of a building downtown. The location was perfect, terms agreeable, good space, everything looked fine, but then another prospective tenant came along and offered to sign a three-year lease; we can only sign for one year, so we lost the race. But then there was another smaller but still agreeable space in the same building where the tenants were delinquent, incommunicado and on the fast track to having their lease terminated. So we waited a bit more, and then on the very day their lease was to be terminated, the tenants reappear and want to carry on, so we lose again.

All this has happened at glacial speed so a couple of months have gone by without results. At least I know what we're looking for now (70-100 square metres, open plan, one-year lease, downtown) and a price range.

I've called a bunch of real estate agents and either they don't call me back, or they don't deal with offices this small, or they don't deal with one-year leases, or they offer me places which are totally hopeless. Yet I know what I'm looking for exists, because I've already found it on my own (almost)!

I found some listings on Trademe but they're mostly unappealing or stale, or direct me to real estate agents who don't call me back.

Today I wandered around my target area and noted down all the buildings that seemed to contain the sort of small leased offices I'm looking for. There are lots, about 18 actually. But only a few of them had contact information on display, and despite my best Internet search efforts, I'm unable to locate building management for the others.

I wonder how this is supposed to work. Are there real estate agents who are actually helpful? Is there a listing service or classified ad network that everybody uses, that I just don't know about? Am I deluded about the availability of the sort of space I'm looking for? Or does the market have the liquidity of granite?

2 comments:

We went through the same thing recently - although we were looking for offices for 20, with plenty of room to expand in the same space. We were also happy to sign a three year lease. The length of the lease is probably the biggest impediment you are facing - landlords really want 3+ years. In fact if you are willing to do three years, over even more, they will start to offer things like paying for fit out costs, initial rent-free periods, etc. I hear they are *really* friendly if you are willing to sign five years (which was certainly more than we were willing to do).As for finding locations, the two methods that seemed to work well for us, were walking around the areas we were interested in looking for lease signs - they are all over the place - and writing down the phone numbers. And, secondly, hitting the property websites like propertylook (e.g. http://www.propertylook.co.nz/search/results.asp?st=2&c=NZ&r=385&pt=O )After a while you realise that there's actually a relatively small pool of agents, and they will start to show you stuff based on your requirements.But, again, I guess looking for a larger space increases their commission, and they know landlords are really keen on longer leases, so tend to prioritise clients that are willing to sign for more than 2 years.There is, apparently, some sort of secondary market of sub-leases (from various sources like companies with 1 year left on a lease, but who need to move because they've out (or under) grown their existing location). Unfortunately I don't know how those companies find people to take on their leases. Perhaps you could ask some of the agents you are in contact with. There may be people who specialise in that market.

Thanks for the info! I just discovered propertylook today. They do have quite a few listings, that's the sort of thing I've been looking for.It's certainly true that our small size and short-term lease needs reduce the pool of options available to us.